I. Brief Description of the Case Introduction
HistoryOn March 10, 1937, Joseph Lewis and Jack Green started Progressive Mutual Insurance Company. They wanted to provide vehicle owners with security and protection, and they thought an insurance company was a good investment for a couple of lawyers who were just getting started. Since its beginning, Progressive has taken an innovative approach to auto insurance. We offered drive-in claims service before any other auto insurance company, and, in another industry first, we allowed customers to pay their premiums in installments an appealing option for those who couldn't afford annual payments. Progressive wanted and still wants to make auto insurance accessible and easy so more people could protect their vehicles. By 1951, Progressive's growth prompted a move to new offices in downtown Cleveland. In 1955, Jack Green became CEO after the death of Joe Lewis, and Peter Lewis, Joe's son, began his career with Progressive. Peter immediately began looking for ways to distinguish the company from its competitors. In 1956, Progressive Casualty Company was formed to write auto insurance for high-risk drivers. Today, the company insures all types of drivers. More growth and expansion in the 1960s brought about the formation of The Progressive Corporation. In 1965, Peter Lewis assumed the title of CEO, a position he held for 35 years until he turned the reins over to Glenn Renwick, current CEO and President, in 2000. Growth and Innovation

Progressive's steady growth continued through the years, which helped fuel the decision to become a public company in 1971. Three years later, in 1974, Progressive moved its headquarters to the Cleveland suburb of Mayfield Village. The next two decades saw steady growth for the company, and in 1987, Progressive surpassed $1 billion in premiums. That same year, the New York Stock Exchange listed Progressive stock under the PGR symbol. Our business philosophy was to approach auto insurance in an innovative way — like no other company had. From that mindset came the following industry standards and achievements * rvice, available 24/7, to provide customers with personal service and support immediately after they reported a claim. * In 1992, Progressive was recognized as the largest seller of auto insurance through independent insurance agents. * In 1994, Progressive surpassed $2 billion in written premium. * Also in 1994, we introduced 1-800-AUTO-PRO, a cutting-edge auto insurance rate comparison shopping service. Consumers no longer had to call several companies to compare auto insurance rates — in one phone call to 1-800-AUTO-PRO, they'd receive a Progressive quote and comparison rates for up to three competitors. Plus, if customers wanted to buy from Progressive, they could purchase an insurance policy directly and immediately on the phone. Today, this service is available by dialing 1-800-PROGRESSIVE (1-800-776-4737). * Another industry first in 1994 was the introduction of the Immediate Response® Vehicle (IRV), a specially marked and outfitted vehicle that brought trained claims professionals to wherever customers needed them — even to the scene...

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1....

...ProgressiveInsurance
Assignment question:
1. What is Progressive’s business?
a. .To provide vehicles owners with security and protection : insurance coverage
b. .Damages compensation
c. .Quick claims service
d. .Immediate response vehicles : inspect of the scene of an accident, estimate, claim and print checks
2. What is critical to the success of the business?
a. Quality of the service: quick payment of the claims Claims processing, timeliness of response
b. .Direct link between adjusters and clients
c. .Vehicle fully equipped to take care of an accident scene
d. .Presence of a fleet of vehicles next to dangerous intersections
e. .Data management
Risk factors and Cost of repairs are processed by an underwriter who determines the premium to pay. This is based on the Law of Large Number (probability).
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...Overview of Insurance Operations 1.27
and reporting, insurers are increasingly interested in auto salvage programs.
Salvage programs are better for the environment and more cost-effective for
insureds.
Functional View of Insurance
The functional view of insurance examines the many and varied functions an
insurer performs as it conducts its business operations.
To carry out the operations of an insurer, many people are needed, all of
whom perform specific functions. A function generally describes a distinct
type of work or an aspect of operations or management requiring special
technical knowledge. An insurer’s core functions are typically marketing and
distribution, underwriting, and claims. These core functions represent the
lifespan of the insurer’s business operations, from getting the business (marketing and distribution), to pricing the business (underwriting), and then to
administering the business (claims).
Insurers perform additional functions that are designed to support these three
core functions. An insurer carries out these additional functions to facilitate
risk transfer, to promote efficiency, and to meet its financial and nonfinancial
goals.
This section provides an overview of these categories of insurer functions:
• Core functions
• Supporting functions
• Other common functional areas
All of the functions included in these categories interact to meet an insurer’s
goals. Some insurers may perform only some of...